Digest

							                                                                         Item 124
                                                                            (2455)
 STATE OF CALIFORNIA                                  Public Utilities Commission
                                                                     San Francisco

 Memorandum


 Date:       August 17, 2003

 To:         The Commission
             (Meeting of August 21, 2003)

 From:       Alan LoFaso, Director
             Office of Governmental Affairs (OGA) — Sacramento

 Subject:    AB 909 (Reyes) – Telecommunication: local and long-distance
             service
             As Amended July 15, 2003


Legislative Subcommittee Recommendation: Support.

Summary: This bill would require local telephone companies that provide both local
and long-distance services to provide customers with an itemized list for each
telephone number detailing the total number of minutes used during a billing period.

Digest: Existing law, Chapter 286, Statues of 2002 (SB 1903, O’Connell), requires
commercial mobile radio services to provide subscribers with a way to obtain
reasonably current and available account information, as determined by the provider,
no later than January 1, 2004.

Existing law, PU Code §2896 authorizes the CPUC to require telephone corporations to
provide customers with sufficient pricing information.

Existing law, PU Code §2890 requires telephone corporations to itemize the charges for
the services they provide.

This bill would require, upon customer request, incumbent local exchange carriers
(ILEC) and competitive local exchange carriers (CLEC) to provide customers
purchasing a plan with both local and long-distance service (bundled plan), or a plan
with a fixed number of minutes, an itemized list for each telephone number detailing the
total number of minutes used during a billing period.

This bill would sunset on January 1, 2007.




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Analysis: AB 909 seeks to address new consumer disclosure concerns associated with
new product offerings by telecommunications providers. These new products arise
from changes in the market place as new competitors enter the long-distance service.
These new plans offer customers unlimited local and nationwide calling for one flat rate.

According to a recent New York Times article,1 these-unlimited use plans commonly
cost $50 to $60 per month (nationwide), including services such as voice mail and caller
ID. This figure compares to an average nationwide expenditure of $48 per household
per month for local and long distance calls under traditional plans.

AB 909 is intended to give consumers a basis of comparison between traditional plans
and flat rate "bundled" plans by requiring telecommunications providers to disclose,
upon request, an estimated amount of minutes applicable to the local calling portion of
the bill and itemization of minutes used under the bundled plan. (Typically, customers
do not receive call by call itemizations with these plans because calls are not charged
individually.)

Current law requires a telephone company to separate billing sections by provider (i.e.
when local service is provided by Pacific Bell and long distance is provided separately
by MCI, for example), include the amount being charged for each product or service,
and to include a clear and concise description of the service or product.

This bill would build upon these requirements by providing bundled or fixed minute
customers, upon request, with a itemized list for each telephone number detailing the
total number of minutes used during a billing period. Not only will customers be able to
review their usage per billing period, they will also be able to compare monthly lists,
enabling them to determine if their current plan is the best option for local and long
distance service.

Suggested Amendment:

AB 909 would not require specified carriers to disclose the total number of local and
long-distance minutes customers use because this bill does account for calls customers
make using local service. As drafted, this bill would require specified carriers to provide
customers with a “break down showing the total minutes of use…for toll and long-
distance service.” A toll call can be both a telephone call made and received within
the same service area (intraLATA local call) or a call made from one service area to
another (interLATA call), but also known as a long-distance call. Whether a toll call is
local or long-distance, a charge is assessed beyond the charge for basic service. So,
this bill would not provide customers purchasing a plan with both local and long-
distance with a “breakdown” of their local minute usage.

This problem would be addressed with following amendment (on Page 2, Lines 15-22):


1. “Phone Companies See Their Future in Flat-Rate Plans of Many Services,” THE NEW YORK TIMES, May
23, 2003, at B1.
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2898. (a) Every incumbent local exchange carrier and competitive local exchange
carrier shall provide, upon request and without charge, to customers electing to
purchase any service package that includes both local and long-distance service, or for
customers that buy a set number of minutes for a fixed price, a breakdown showing the
total minutes of use in the billing period listed under one telephone number for toll local
and long-distance service.

Legislative History:

   Assembly U&C: 8-2 (do pass) (4/28/03)
   Assembly Approps.: 17-7 (do pass) (5/21/03)
   Assembly Floor: 44-29 (do pass) (5/27/03)
   Senate E.U.&C: 6-0 (do pass) (7/8/03)
SUPPORT/OPPOSITION

Support: MCI, Office of Ratepayer Advocates, The Utility Reform Network
Opposition: Verizon


Legislative Staff Contact:
Matthew Marcus, Legislative Liason                      mnm@cpuc.ca.gov
CPUC-OGA                                                (916) 327-3455

Alan LoFaso, Legislative Director                       alo@cpuc.ca.gov
CPUC-OGA                                                (916) 327-7788

Date: August 17, 2003
                                                                   Item 124 (2455)
                                                                            Page 4

BILL LANGUAGE:

BILL NUMBER: AB 909       AMENDED
        BILL TEXT

       AMENDED   IN   SENATE JULY 15, 2003
       AMENDED   IN   SENATE JULY 2, 2003
       AMENDED   IN   SENATE JUNE 18, 2003
       AMENDED   IN   ASSEMBLY MAY 1, 2003
       AMENDED   IN   ASSEMBLY APRIL 23, 2003
       AMENDED   IN   ASSEMBLY APRIL 10, 2003

INTRODUCED BY    Assembly Member Reyes

                           FEBRUARY 20, 2003

   An act to add and repeal Section 2898 of the Public Utilities
Code, relating to telecommunications.


       LEGISLATIVE COUNSEL'S DIGEST


   AB 909, as amended, Reyes. Telecommunications: local and
long-distance service.
   Existing law empowers the Public Utilities Commission to regulate
telecommunications services. The Telecommunications Customer Service
Act of 1993 requires the commission to require telephone
corporations to provide certain customer services to
telecommunications customers, and authorizes the commission to
require telephone corporations to provide additional services.
   This bill, until January 1, 2007, would require that every
incumbent local exchange carrier and competitive local exchange
carrier provide, upon request and without charge , to
customers electing to purchase a service package for both local and
long-distance service, or for customers that buy a set number of
minutes for a fixed price, a breakdown showing the total minutes of
use in the billing period listed under one telephone number for toll
and long-distance service. Because violation of an order, decision,
rule, direction, demand, or requirement of the commission is a crime
under existing law, the bill would impose a state-mandated local
program by creating a new crime.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1. The Legislature finds and declares all of the
following:
   (a) The telecommunications industry is evolving towards offering
to consumers various package options, which include local, regional,
and long-distance service.
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   (b) Consumers have a right to make intelligent and informed
decisions relative to what telecommunications services they wish to
purchase.
   (c) Consumers are able to make intelligent and informed decisions
relative to what telecommunications services they wish to purchase,
only when they are able to determine how much they are being charged
for local and long distance calling.
  SEC. 2. Section 2898 is added to the Public Utilities Code, to
read:
   2898. (a) Every incumbent local exchange carrier and competitive
local exchange carrier shall provide, upon request and without
charge , to customers electing to purchase any service package
that includes both local and long-distance service, or for customers
that buy a set number of minutes for a fixed price, a breakdown
showing the total minutes of use in the billing period listed under
one telephone number for toll and long-distance service.
  (b) This section shall remain in effect only until January 1, 2007,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2007, deletes or extends that date.

  SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.